Oh, those crazy Frenchies: Facebook faces family photo tax in France
Facebook should pay the French government for hosting the holiday photos and status updates of the French people, a new report commissioned by the French government has suggested. The new 200-page report* on taxing the digital economy - commissioned by four French Cabinet Ministers - proposes that France should tax data …
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Re: @ Tom 35
so, at the end, the tax is paid by the customer.
It means that this tax subsidize other sectors. By example, traditional media, up 1-2b, very close to the government.
More than distorting fair competition or at best helping local industries, this shows off, once more, the deep and weaved level of corruption in the french government.
Re: I'm sorry...
> BTW: In reality, if intercity flight routes in France were lucrative, other airlines would have picked them up by now and be making good money.
Airline routes can only be run by airlines if they get a _licence_ to do so. No airline can just stick a plane at an airport and start selling tickets.
Re: I'm sorry...
@Richard Plinston
Airline routes can only be run by airlines if they get a _licence_ to do so. No airline can just stick a plane at an airport and start selling tickets.
Erm, who said anything different to that?
The point as I read it was that if the Ryanair routes had been so lucrative (given that the argument was Ryanair was miffed at a tax increase and surrendered a profitable business in protest), which means that any other airline would have been able to pick up the business and make a profit.
Of course they need operating licences and the like, but that is part of their business - if they dont know how to go about getting that, then they shouldnt be an airline.
Alternatively, the routes arent particularly profitable (for whatever reason) and Ryanair simply wanted to be able to make a protest while retreating from a loss.
Re: @ Tom 35
I know if I was a wine maker and the government decided to increase the tax they take from wine makers specifically by a factor of 10, I would be pretty miffed.
I cant argue with that and nothing I was saying was there to imply that what the French government were doing was "morally" justified (although moral taxes is a totally different argument).
The reality is any business has to trade in an environment set by the country in which they operate. Frequently laws are changed which make one business model no longer acceptable and businesses have a choice of either changing, moving or closing.
If you ran a company which sold wine internationally, you might be pretty miffed that it is really hard advertising your products in Saudi, and in the UK we might all agree that it is a barking mad approach, but in reality it is just the business operating environment.
In this example, yes, Farcebook et al, might be pretty miffed at the increase in tax, and they might (rightly) feel it is unjust and a way of taxing a particular type of company (but this happens in lots of other ways anyway) but if the French government changes it tax in this manner, they have a simple choice - sacrifice their profits in a sulky protest, or accept the increased cost of doing business.
Obviously when the increased cost outweighs the profit, then the choice becomes clear, but until then, profit is profit.
Re: idTGV
We used idTGV to book tickets from Paris to Toulouse and back last summer. Both sets of first class tickets for less than second class London to Edinburgh, and very comfortable. I'd recommend it to anyone with the option travelling long distances in France.
Re: I'm sorry...
@Robert Long 1:
"Quite the opposite. The public is demanding that their taxation be reduced by collecting the missing billions from multi-nationals using fraudulent companies. Every penny Vodafone avoids is a penny we have to pay in their place."
So where does vodafone get it's money from? Oh yes, that's right, you! So is taxing companies more a good thing? NO, it'll just result in more inflation.
Re: I'm sorry...
"So where does vodafone get it's money from? Oh yes, that's right, you! So is taxing companies more a good thing? NO, it'll just result in more inflation."
Don't be so stupid.
Vodafone don't get any money off me as I'm not a customer. You're saying that everyone in the country should subsidize Vodafone (and Amazon etc) regardless of whether they use their products or not.
Re: Robert Long 1 Re: I'm sorry...
"......You're saying that everyone in the country should subsidize Vodafone (and Amazon etc)....." Please do explain how you or anyone else is "subsidizing" Vodafone or Amazon? Where the make use of public utilities they pay for them with business rates. When they but property or equipment for their offices they pay for it with money just like other companies and taxes on those purchases. If the politicians can't extract enough tax from such companies then they need to change the tax laws, but to suggest they are being subsidized is simply untrue.
Re: Robert Long 1 I'm sorry...
""......You're saying that everyone in the country should subsidize Vodafone (and Amazon etc)....." Please do explain how you or anyone else is "subsidizing" Vodafone or Amazon?"
If a company is paid by people not using its services then what else can you call it but a subsidy? Not being charged for something is the same as being paid, and Vodafone for one is not being charged the tax they themselves thought they were due. That means that everyone who is paying their tax is supporting Vodafone whether they are customers or not.
I don't see what's difficult to understand about that.
"If the politicians can't extract enough tax from such companies then they need to change the tax laws"
Or, enforce the ones we have equally regardless of who the tax-payer is or how many dinners at the Ritz they buy for the head of HMRC.
Re: Re: Robert Long 1 I'm sorry...
".....If a company is paid by people not using its services then what else can you call it but a subsidy?...." You still failed to produce an example of this. Are you claiming Voda or any of these other target companies charged non-customers for a service that wasn't used by that customer? Please supply some form of evidence such as a link to an article to support this claim.
"....Not being charged for something is the same as being paid...." Not really, that's actually like saying if I skip out on paying a dinner bill I've somehow taken extra money out of the restaurant till. Sure, they have lost money on the bill I did not pay, but I have not stolen extra on top. You are trying to make one offence into something twice as bad. Again, if you think that is the case, please supply some details.
"....and Vodafone for one is not being charged the tax they themselves thought they were due...." Tax due is calculate by the HM Revenue & Customs, not Voda. When contracting an accountant and I often thought I should be paying a certain amount of tax only for HMRC to disagree (on one happy occasion asking for less and twice others later coming back and admitting they had asked for too much!). Voda may think they actually should have paid more or they may just have said that for the press, but the reality is the Government sets the tax laws and HMRC collects the tax, so if they are not asking Voda for more at the time then Voda are in the clear as long as they have not illegally hidden information from HMRC. So, are you accusing Voda or any of the other companies of illegal tax evasion or of HMRC illegally colluding in tax evasion? Again, please do supply some evidence, otherwise I'll just have to assume it's just groundless bleating.
Re: Robert Long 1 I'm sorry...
"You still failed to produce an example of this. Are you claiming Voda or any of these other target companies charged non-customers for a service that wasn't used by that customer?"
They were given a government subsidy in the form of being let off a huge whack of the tax that Vodafone thought they were due. The charge was indirect, but all the more of a subsidy because it was given by the government and thus we had no choice in the matter.
"....Not being charged for something is the same as being paid...." Not really, that's actually like saying if I skip out on paying a dinner bill I've somehow taken extra money out of the restaurant till.
No. Firstly, that's just inherently different because you're focusing on the restaurant, I'm saying that in a case like that YOU have effectively been paid because you have received goods without paying for them. Secondly, even if we were talking about the restaurant, it would still be different because it brings in questions of Wholesale and Retail. But I suspect you knew that and were trying to confuse the issue.
"So, are you accusing Voda or any of the other companies of illegal tax evasion or of HMRC illegally colluding in tax evasion? "
Yes. That's exactly what I'm accusing them of. Corruption of a public servant. Specifically of Dave Hartnett.
I'm not going to indulge your childish pretence of innocence any further, Matt. You know fine well what this is all in reference to, so stop being a dick.
Tax Dodging corporations
The real issue, when you get Facebook playing 0.13% tax on profits made from your citizens - then what is a mofo to do?
"Google, Apple and Amazon make between €2.5bn and €3bn apiece in revenue from France. However the average tax paid by each company is €4m a year, instead of the €500m in corporation tax they'd pay if they were French companies."
I'd love to know how these figures were calculated. If I view a Google ad for a Korean company placed on my UK screen by a server in Ireland (or Poland or Kazakhstan), where should the revenue be allocated? And do French companies really pay 20% of their revenues in tax (or is that actually VAT)?
you forgot to hop through a French proxy in that chain to land "in France".
I'd assume the €4m tax reference is the tax they pay in France. What all these "look, they're avoiding taxes!" rants often fail to point out is they're only (and legally) avoiding or rather minimising taxes in a particular country but still pay taxes elsewhere. Google, Facebook etc of course are paying plenty of taxes in the US and their European based counterparts pay taxes in the most tax efficient part of Europe, which they are entitled to do under our ideal of a free market in Europe and are required to do so for their shareholders.
And besides anyone at all can trade with another country and may have to pay local taxes for the trades but you don't pay corp tax if you don't have a business there.
Good point.
Stuff like that is exactly what keeps bureaucrats, tax law specialists, economists, diplomats etc in cushy jobs, committees figuring it out, trying to set up treaties etc.
Beer because I need it only thinking about this.
and they past huge amounts of tax in Bermuda...
And the fortunes of the richest 100 people in the world increased by $2.4bn EACH last year.
But of course, they paid their fair share in tax, right?
Oh dear, seems not. No-one actually knows how much money is held permanently offshore in tax havens, but I've seen estimates ranging from about 10 Trillion to about 32 Trillion.
http://www.oxfam.org/sites/www.oxfam.org/files/cost-of-inequality-oxfam-mb180113.pdf
Simpler option
A simpler option when faced with tax avoidance in the complex world of accountancy rules would be to replace corporation tax with a tax on turnover, maybe just for turnover above £1M or equivalent. If you assume that a typical business should make around 10% profit, then tax at 2% turnover instead of 20% on profit, etc.
OK, it is kind of unfair that high-profit entities pay less on the earnings, and those below 1% profit are going to be heading for bankruptcy (though to be fair if you can't make 1% profit then it looks grim anyway).
Re: Simpler option
Many successful retailers make ~1% profit on turnover - John Lewis for example. In reality, it would just be added to the sale price - we could call it VAT for simplicity.
Re: Simpler option...
...but a stupid one.
Take you are aware very few businesses make any profit for the first few years (maybe as long as 5 years), of course you are, because you've done some research on the subject before posting?
So whack on a turnover tax and 99% of those would die in the within first year.
@Chris Miller
My apologies, I had not realised the margins were that thin even for a successful retailer.
Re: Simpler option
I think the rule would need to be slightly more sophisticated. But in principle.....
How about where the company is UK based only (no parent companies) they can pay corp tax as they do now. (Probably need a turnover limit too)
Where they are international no more than x% of foreign costs (defined by business type) can be tax deductible. (For example coffee may be 20% but steel 60%). Any non physical goods 0% and the product has to physically pass into the country so server hosting is out!
Tax should be paid when the payment is issued from for the product or service. For example if marks and Spencer advertise uk products on you tube and pay Google 1m from their London office then that is taxable here from Google . If they pay from France then it's taxable in France. However, if m&s decide to do that then m&s UK then can't claim tax relief on the £1 they would have been cross charged from the France part of the business. Either way collect 200k of tax.
Probably a flaw and may be difficult to legislate but something along those lines must be do able
Re: Simpler option
Alas no. I work part time for a specialist finance company, and dare I say it in terms of capitalism, one of the good guys.
We obtain funding from banks at a margin over Libor and finance international trade at a few basis points over that. Our turnover is hundreds of millions per annum, our profit is the difference between the two rates, less our expenses (staff, offices, IT kit and no, we don't pay telephone number salaries or bonuses) and amounts to a couple of million a year. Its a profitable business within reason but the simplistic approach would end us at a stroke, or mean that we'd have to be passing on much higher costs to our customers, who in turn would have to do the same to theirs.
I suspect that many other operations in other sectors (small retailers, farmers etc) would have similar issues. That said, you're quite correct in that the entire tax system needs simplification.
Re: Simpler option
So what happens if you make a loss in one year? Still got to pay your tithe to the massa in de ole plantation?
Honestly, these threads on tax, do you all come over from the Guardian website?
@Flatpackhamster
I think you will find you still have to pay your employer's NI contribution, and your rates and VAT, etc, even if you don't make a profit.
Taxation is all about taking your money for the common good.
The main arguments are about what the "common good" should be (often politically driven), and just how do you distribute that cost fairly. What we now see are Byzantine tax laws that allow the biggest of company to legally avoid paying a fair share, while smaller companies and individuals end up paying more to make up for that.
There may be no simple option, but something simpler and fairer HAS to be possible.
Re: Simpler option...
"Take you are aware very few businesses make any profit for the first few years (maybe as long as 5 years), of course you are, because you've done some research on the subject before posting?
So whack on a turnover tax and 99% of those would die in the within first year"
In those 5 years the company isn't living off air, it's burning money. Put a small tax on the relatively small turnover they'll have at the start and they'll just burn money slightly faster. If that puts you out of business, then tough shit. I'm not paying my taxes to give your business ideas a free ride.
Honest laws
I think that governments in general should state honestly what is the purpose of the laws. Creating a tax on data, and justifying it by saying the users are workers collecting valuable information for the company sounds more like insane troll logic than anything else. They might as well come out and say honestly, we are taxing you people because we need the money and you can afford it.
The French government seems adept at these disingenuous justifications. E.g: The law which forbids people from covering their face in public is claimed to be a matter of security, and not at all a way to push Muslim integration by stopping the practice of wearing a veil. Never mind that the same law prescribes especially harsh punishment for a person who forces other people to cover their face, like a Muslim husband might do to his wives and daughters. Relation to security: None.
Re: Honest laws
Turkey also forbids the veil, even though the population is mostly moslem.
Re: Honest laws
Yes, but they say directly why they forbid it, i.e. because they want a secular and modern country. They don't make bullshit claims about it being a matter of security.
Re: Honest laws
"Yes, but they say directly why they forbid it, i.e. because they want a secular and modern country. They don't make bullshit claims about it being a matter of security."
France has been secular for over 100 years now and has laws to that effect. In fact their first tussles were predominantly with Roman Catholics because the state seized all their churches and the religion only supervises their use now. Muslims may feel aggrieved and perhaps security was one excuse / reason but it's really nothing new in that country.
Re: Honest laws
I've always found it interesting that a mulsim woman can wonder around an airport with their whole body covered, head to toe, yet if I walked in there in motorcycle leathers & helmet, I would likely be approached by armed security and if I was lucky politely asked to remove my helmet...
Maybe its my age, but I was always taught that you should remove hats when inside, and I would not allow anyone inside my house who had a face covering, or even open the door...
I'm terrible sorry for the inconvenience
But here in La Belle we have a government of unreconstructed 1950s socialists and communist. They are, to a man (and woman, and especially the greens) away with the fairies, but alas they did a good job convincing the electorate that they were nice cuddly socialists à la Tony Blair (bad enough I hear you shriek, but they had to get rid of the nymphomaniac midget).
So I am afraid with have got another 3 years or so of this kind of idiocy before normal service is resumed. Whatever that is.
Re: I'm terrible sorry for the inconvenience
In France, socialist idiocy is normal service (I live there). The midget was a brief period of sanity. Arrogant, nacissistic, Napoleonic sanity, true, but sanity nonetheless.
Re: I'm terrible sorry for the inconvenience - Just wondering ...
" ...nymphomaniac midget."
Where can I find pictures of her on the internet?
Re: I'm terrible sorry for the inconvenience
So I am afraid with have got another 3 years or so of this kind of idiocy before normal service is resumed. Whatever that is.
Is there a reason why you cant move to a country with politics more in keeping with your own?
The report argues that tax hasn't caught up with the digital economy
This is the one part I can agree with.
Fantastic!
Can I at once urge all our French cousins to upload *shitloads* of pics to facebook. Thousands, please.
In other news, short Failbook stock now
Biere pour tout, parce-que je n'ai plus du vin :o(
Re: Fantastic!
je n'ai plus de vin, SVP.
Tu es Miles Kington et je claim mon €5.
Re: Fantastic!
Super! Maintenant je ne dois pas penser pour une autre microsecond si on dit 'du' ou 'de'!
Merci, mon professeur!
"After expressions of quantity, the partitive is usually reduced to DE which is invariable:"
Google and Facebook have not yet responded to our request for comment on the report
..they were too busy laughing at the lunacy of it all...?
economy plan
France's new plan is a perl script which uploads 2000 jpgs of random images per minute to random sock puppet facebook accounts
watch the tax come rolling in!
Re: economy plan
don't forget that Perl script, as used in a commercial context, would have to be in French.
If Facebook / Google got any sense, they'll simply open a specific subsidiary for handling French customers. Then put a line item in it's accounts of 99% turnover for complying with silly language laws (Toubon etc), and make sure the French subsidiary actually makes a loss. Oh, and make sure it has no employees or physical assets.
Or just charge French subscribers, and wait for French politicians to scream about EU single market etc - even though France itself is one of the biggest obstacles to the proper implementation of that single market.
I've talked to one of these Colins
I wrote about this tax elsewhere. And ended up being emailed by a rather pissed off Frog.
The gist of his argument was actually this:
We can't tax these bastards any other way (EU rules, Single Market, OECD Double Taxation treaties and all the rest) so we'll make something up and see if it flies.
That really is it. The taxing data thing is purely and simply because the law doesn't currently prevent them from doing so.
Re: I've talked to one of these Colins
read your other article, and am not surprised you got that sort of response - not because of article itself, that simply points out the folly of the scam. Sorry, scheme.
If your correspondent were more honest she/he would've said "we have very few home-grown global Internet champions, because our legislation about languages, working hours and so on could not have be better designed to prevent startups that have even a dream of going global, so let's just try to tax everyone else's - sod EU law about cross-border trade, the only bits of EU law that apply to us are the ones we want. Now the cherry-picking of EU law is wrong, the British must not be allowed to suggest it, we don't do that.
We just choose which bits we want to enforce and which bits we want to ignore, completely different thing."
Merde?
Yes, I checked the date and it isn't April 1st. Nice idea, but it's not going to fly. Either FaceBook will refuse connections from French IP addresses or they'll start charging French users for access to offset the tax, or the French Ts and Cs will make the users liable to foot the tax bill on behalf of FaceBook.
Or they'll just ignore it, in which case we need to introduce their management to that quaint English gesture that was supposed to have originated from battles against the French, namely the two-fingered salute.
Mind you...
If the companies threaten not to pay, the french will surrender anyway, so problem solved.
French socialists ...
even crazier than British ones.
"If you drive a car, I'll tax the street,
If you try to sit, I'll tax your seat.
If you get too cold I'll tax the heat,
If you take a walk, I'll tax your feet.
Don't ask me what I want it for
If you don't want to pay some more
'Cause I'm the taxman, yeah, I'm the taxman"
George Harrison et al.
Paris because ...
Workers...
So if anybody who uploads pictures in France is considered a worker then presumably this means they are a worker and it would be illegal under the working time directive for them to be on facebook more than 35 hours a week. Under minimum wage laws presumably Facebook would also have to pay their users/'workers' €9.40 each hour they spend uploading their 'product'...
Re: Workers...
You could consider that they are working off the watchful eye of the Great Taxator and so should be hammered for their impudence.
I heard that the tax authorities went to amazon.fr for some protection money. Amazon told them to piss off because their revenues were basically transferred to the "mother company" in Luxembourg (a medium-sized office, I reckon), so the french tax authority couldn't put a bypass on the money flow. French tax authorities then went digging for data protection violations in the amazon.fr datastore, because, had they discovered them, the french CNIL would become involved and there is a law that in that case, the tax authorities get to have full control of the revenues. Don't know what became of that.
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